When purchasing anything, it is important to ensure that you have a budget in mind. It is these positive spending habits that will help you through life. But when it comes to purchasing a car, many newer models are just too expensive to purchase outright. However, with various financing options on the market available, it is possible to gain access to the car you want with ease.
Set A Clear Budget
Before purchasing a car, it is important to set a clear monthly budget. With anamount in mind before searching, you can make sure you are purchasing a car that you can afford. When choosing your max budget, you should allow for insurance and tax as well as running costs such as fuel. This will ensure that you can run the car comfortably off the monthly wages that you have. This will ensure you can comfortably afford to own and run the car daily.
Look into Your Finances
When you have set your budget, it is then time to look into your current financial situation. Would it be easier to purchase the car outright or is it more affordable to look into monthly repayments? If you currently have bad credit, for example, it could be more suitable to opt for specialist finance. Options such as CCJ car financeare designed for those with bad credit and have a CCJ, IVA or Default showing on their credit file. It may be worth looking into your finances, as a result, to ensure you are choosing the most affordable option for you.
Understand Finance Options
The final element to consider is the finance options that are available to you. Whether this is a leasing loan for the car or an HP finance option, there are multiple ways that you can set about paying for the car that you want. To help you get started, we have broken down some of the finance options available to you.
HP Finance – This type of financial loan is one of the most common as they feature a low deposit typically of around 10% and have a loan term of between 12-60 months. They also include fixed interest rates throughout the loan term and can be an affordable way of paying for a car. However, it is important to note that you will not own the car until after the full amount has been paid.
PCP Finance – In an ideal world, many of us would love to be able to afford a car outright. However, for a lot of us, this just is not possible. This is where PCPcomes in. Personal Contract Purchases are a loan on the value of the car from start to end of you driving it. This loan is paid off in monthly instalments and has multiple options when the loan ends. One of the main options is trade in the car for a newer model, however, there is also the option to Hand back the car to the dealer and pay nothing or pay a balloon payment to the lender in exchange for full ownership of the car. It is important to remember at the end of the term you will not own the vehicle unless you opt to pay the balloon payment.
Whether you are looking to upgrade or you are looking for a new car quickly following an unexpected breakdown, there are several ways that you can gain access to a new car regardless of whether you choose to buy outright or finance it.